BUNKERWORLD INDEX: Supply limits support bunker prices amid wobble in crude markets
11th February 2022 14:29 GMT

Tight availability, especially of 0.5% sulfur fuel oil, at key ports nudged bunker prices up in the week ending Feb. 10, amid a slight wavering in the wider oil complex’s upward trajectory.

The S&P Global Platts 0.5% sulfur fuel oil index ended the week at $725/mt, up $8/mt on the day, up $9/mt on the week and $72/mt higher than 30 days previously.

The BW380 index, which represents value for 3.5% sulfur fuel oil, ended the week at $556.50/mt, up $2.50/mt on the day, down $1/mt on the week and $45/mt higher than 30 days previously.

Tightness remained across the oil complex, with US crude stockpiles falling to their lowest level since 2018 in the week ended Feb. 5 and geopolitical tensions supporting crude markets. However, US-Iran talks and a stronger US dollar had limited the upside, analysts said.

High bunker costs and port bottlenecks will remain in place in 2022, container line A.P. Moller-Maersk said Feb. 9, but it expects its core container shipping division to return to pre-pandemic activity levels during the second half of the year.

Higher fuel prices, against the backdrop of bullish crude markets, came alongside steeper container handling costs and increased inflationary pressure from operational congestion and bottlenecks, Maersk said in its 2021 full-year report.

The Middle Eastern bunker hub of Fujairah faces tightening supply of the International Maritime Organization-compliant bunker fuel grade due to a shortage of components for the 0.5%S fuel oil blending pool, according to local bunker suppliers.

“Demand is quite normal in Fujairah and holding at average levels, so the lessening [0.5%S FO] supply is due more to a shortage of [blending] components than demand-driven factors,” a Fujairah-based bunker supplier said, adding that inventories could tighten further toward March.

At Rotterdam, traders reported tightness of all bunker products, and expected this to carry over into next week.

Several key ports in Latin America were experiencing tight supply of marine fuel 0.5%S and high sulfur IFO 380. Among them is Panama, where availability of 0.5%S is low because of higher resupply and freight costs, traders said. High sulfur bunker fuel continues to be scarce with only one or two suppliers providing it for the spot market, but fresh supply is expected by end-February, they said.

The BW Indexes are weighted daily indexes made up of price assessments at 20 key bunkering ports. To obtain a representative geographical spread, the ports were selected by size with reference to their geographical importance.

The BW 0.5% Sulfur Index ports are Hong Kong, South Korea, Shanghai, Singapore, Japan, Las Palmas, Durban, Fujairah, Gibraltar, Piraeus, Rotterdam, St. Petersburg, Houston, Los Angeles, New York, Balboa and Santos.

The BW380 Index ports are Busan, Canary Islands, Colombo, Durban, Fujairah, Gibraltar, Hong Kong, Houston, Los Angeles, New York, Offshore Nigeria, Panama Canal, Piraeus, Rotterdam, Santos, Shanghai, Singapore, St. Petersburg, Suez and Tokyo.

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Bunkerworld .,
11th February 2022 14:29 GMT